Subpar Technology Could Steer Clients Away from Advisers

Adviser360 has released findings from its 2022 Connected Wealth survey, examining the relationship between financial advisers and the technology they use to support their clients.

The wrong technology can cost advisers real dollars and real clients. The survey found that 65% of advisers surveyed have lost business from clients or prospects due to outdated wealth management technology.

More than half (58%) of the 300 respondents of the inaugural survey classified their technology as “modern,” but only 3% would call it “integrated and innovative.” The remaining 39% said they need a technological upgrade, the survey says. Respondents who say they have modern technology are 50% more likely to report growth in new client assets and 33% more likely to get client referrals, compared to those who say their technology needs an upgrade.

“Technology can be a game changer for advisers who want to grow their business,” Richard N. Hart, Advisor360 senior vice president for corporate development, said in a press release. “Firms that can’t innovate to today’s standards or don’t stack up to peers are leaving money on the table.”

More than half of advisers who report losing business because their wealth management technology did not meet expectations say this has happened with prospects, the survey says. The rest report losing business from existing clients.

The survey found that firms need to assess how well their existing technology enables advisers to work with clients, since 53% of respondents consider their technology to be an extension of their practice. Nearly 30% of advisers believe their current technology holds them back when it comes to new business.

According to the survey, the majority of those surveyed give their existing wealth management platforms high marks for enabling them to focus on their most important clients (67%) and deliver robust financial planning advice (63%).

Advisers believe that improved digital onboarding could have the biggest impact on their practice and the way they work with clients, the survey says. Of those surveyed, 25% categorize their current onboarding process as a “constraint” when it comes to getting new client relationships off the ground.

Within their existing platforms, advisers complain the most about the lack of automation and functionality. The survey found that 41% of advisers spend an average of two hours scheduling, running and reconciling reports before each client meeting—and 26% spend more than two hours. In addition, 58% of advisers say their account aggregation capabilities need to be improved.

Advisers surveyed believe the most important aspect of a client’s digital wealth experience is their ability to see a complete picture of their financial lives. According to the survey, 43% of respondents say their technology is primarily adviser-facing, not client-facing, signaling clients may be due for a refresh.

According to the survey, advisers find that clients are product-savvy and want access to technology products specific to their financial goals. Advisers say client demand is highest for structured investments, followed by annuities and long-term care insurance.

Advisers are also striving to use technology to connect with clients in ways that are familiar outside of the financial planning world, the survey says. Though 73% of advisers say Millennials and Gen Z require a different type of engagement than Baby Boomers and Gen X clients, tech-savviness has no age barriers. More than three-quarters (76%) of advisers noted that the ability to securely text or direct message clients of all ages has transformed client relations. Eight in 10 (82%) say that integrating social media platforms into client-facing tools is a must-have, with nearly 30% considering this to be extremely important.